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Why should they trust CEOs?

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in Leaders & Managers

When you’re wondering how important trust is, ponder these gems:

• Bob Nardelli’s imperious reign at Home Depot was neatly summed up at the annual meeting where he shut off the microphones of shareholders after 60 seconds. He leapt out of there with a $210 million parachute.

• Robert Crandall, former CEO of American Airlines, advised his employees not to buy stock in their own company, calling it “a horrible investment.”

• Hewlett-Packard chief Carly Fiorina managed to slash the company’s value in half before getting the ax herself, whereupon its stock price soared. In the words of one analyst, “the market’s hope is that anyone will be better than she was.”

• Bear Stearns CEO James Cayne
refused to take responsibility for his actions, blamed and fired his underlings, sold every last share he owned in the company, and went AWOL to play golf while the company burned.

Result: Americans don’t trust CEOs.

In a 2002 Golin/Harris Trust Survey (years before the subprime meltdown) two-thirds of Americans held CEOs personally responsible for restoring trust in business, and fewer than a third thought they were doing it.

According to the Edelman 2008 Trust Barometer, also released before last year’s market flameout, a mere 20% of Americans said they trust CEOs to do the right thing.

Instead, “they see arrogance, blundering and unabashed greed,” observes Jason Jennings, author of a primer for new leaders. While traveling in the Midwest recently, he attended Sunday services and winced at a hellfire-and-brimstone attack on “gluttonous” CEOs and their minions.

The solution? Let integrity drive your every move. Research has shown that lost trust can be restored, but it’s slow slogging.

— Adapted from “Why Americans Don’t Trust CEOs,” Jason Jennings, The Conference Board Review.

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